At a speech this week to the Idaho Credit Union League, new National Credit Union Administration Board Chairman Rick Metsger announced a review of the agency’s examination process, including the frequency of examinations. The move, which has been a top priority for the League, will begin through a stakeholder working group.
Shortly after his speech Metsger described his “number one priority this year is to focus on continual quality improvement.”
“I learned over the last couple years, that the calendar year requirement has created an administrative bottleneck, particularly at the end of the year,” he said. “You’re trying to meet an arbitrary requirement that doesn’t lead to an effective or efficient exam process.”
“Implementing commonsense exam reform has been at the top of our national regulatory priorities for 2016,” added Brandon Luetkenhaus, Director of Governmental & Public Affairs for NCUL. “The change is a testament to NCUA staff who was willing to listen to our concerns and took action.”
Metsger added that he’s talked to credit unions who’ve experienced issues. “In those cases, they aren’t being critical. It’s just not efficient for anyone to be scrambling at the end of the year. That’s not the way we should put together a work schedule. The good news is, everyone seems to agree this is something that has outlived its usefulness. It was a good idea in the middle of the crisis, but now we have a better handle on where the real issues are in every region. There’s no reason not to have a more thoughtful work plan.” The goal, Metsger said, is to implement this change within the next two months.
Removing the calendar year requirement will not alter the general objective of examining credit unions every 12 months, he said, but it is a necessary first step towards establishing an extended examination cycle for well-managed, financially sound credit unions. Metsger said enhanced technology tools—a revamp of the AIRES exam platform is pending—should enable NCUA examiners to collect more, and better, data without having to make onsite visits, benefitting both credit unions and NCUA’s workforce.
Metsger hopes to turn his attention to the working group “in the next week or two” and pointed to the recent field of membership working group as a model. “I want this done expeditiously,” he said. “I have a few people in mind, but everyone will have a chance at input. I want to move forward sooner rather than later.”